Bba Llb SEC E_quiz2_principles Of Accounting

12 Questions | Total Attempts: 81

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Bba Llb SEC E_quiz2_principles Of Accounting

Maximum Marks for this Quiz will be 30. Ten questions carry 2 marks with a negative mark of. 5 (1/4) for each wrong answer. (10x2) Two questions have 5 marks with a negative mark of 1. 25 (1/4) for each wrong answer. (2x5) All the best folks ! Don' do Jai Matha ji. . There is negative marking. Chose the answer wisely BE CALM and PROCEED


Questions and Answers
  • 1. 
    The Cash Flow Statement can be prepared with Direct or Indirect Method. The difference in presentation between both the methods affects
    • A. 

      Investing Section only

    • B. 

      Operating Section only

    • C. 

      Financing Section only

    • D. 

      All of the above

  • 2. 
    5 Marks Question: A company's income statement showed the following: net income, $134,000; depreciation expense, $30,000; and gain on sale of plant assets, $4,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses increased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities
    • A. 

      $156,600

    • B. 

      $141,000

    • C. 

      $96,600

    • D. 

      $88,600

    • E. 

      $148,600

  • 3. 
    The statement of cash flows reports all but which of the following? 
    • A. 

      Cash flows from operating activities.

    • B. 

      Cash flows from financing activities

    • C. 

      ​​​​​​Cash flows from investing activities.

    • D. 

      Significant noncash financing and investing activities

    • E. 

      The financial position of the company at the end of the accounting period.

  • 4. 
    Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as
    • A. 

      Financing activities.

    • B. 

      Investing activities.

    • C. 

      Operating activities.

    • D. 

      Indirect activities

  • 5. 
    The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is
    • A. 

      Operating activities

    • B. 

      Financing activities

    • C. 

      Investing activities.

    • D. 

      This is not reported on the statement of cash flows

  • 6. 
    5 Marks Question: The accountant for Mandarin Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:   What is the amount of cash dividends paid that should be reported in the financing section of the statement of cash flows?   
    • A. 

      $42,000

    • B. 

      $43,000

    • C. 

      $63,000

    • D. 

      $1,000

    • E. 

      $41,000

  • 7. 
    Which of the following items is reported on the statement of cash flows under financing activities?
    • A. 

      Declaration of a cash dividend

    • B. 

      Payment of a cash dividend

    • C. 

      Declaration of a stock dividend.

    • D. 

      Payment of a stock dividend.

    • E. 

      Payment of stock dividend

  • 8. 
    Which one of the following is representative of typical cash flows from operating activities?
    • A. 

      Proceeds from collecting the principal amounts of loans.

    • B. 

      Repayment of principals on loans.

    • C. 

      Proceeds from the issuance of bonds and notes payable

    • D. 

      Payments by a merchandiser to acquire equity securities of other companies

    • E. 

      Receipts of cash sales

  • 9. 
    The statement of cash flows cannot help address questions such as
    • A. 

      How is the increase in investments financed?

    • B. 

      What is the source of cash for new plant assets?

    • C. 

      How much cash is generated from or used in operations?

    • D. 

      How much of the company's revenues have been retained as profit?

    • E. 

      Why is cash flow from operations different from income?

  • 10. 
    When preparing a statement of cash flows using the indirect method, each of the following should be classified as an operating cash inflow or outflow except
    • A. 

      An increase in accounts receivable.

    • B. 

      A decrease in accounts payable.

    • C. 

      Proceeds from the disposal of a long-term asset with no gain or loss.

    • D. 

      An increase in prepaid expenses.

    • E. 

      A decrease in accrued expenses payable.

  • 11. 
    Use the following information to calculate cash paid for wages and salaries: Salaries expense                            $168,000 Salaries payable, January 1           6,400 Salaries payable, December 31    10,600
    • A. 

      $157,400

    • B. 

      $163,800

    • C. 

      $168,000.

    • D. 

      $172,200

    • E. 

      $174,400.

  • 12. 
    When preparing a statement of cash flows using the indirect method, which of the following is correct? 
    • A. 

      Proceeds from the sale of equipment should be added to net income in the operating activities section

    • B. 

      A loss on the sale of land should be added to net income in the operating activities section

    • C. 

      The declaration of a cash dividend should be a use of cash in the financing activities section

    • D. 

      The issuance of a stock dividend should be a use of cash in the financing activities section.

    • E. 

      The issuance of a stock dividend should be a use of cash in the financing activities section.

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